At a Chinese New Year constituency dinner
in Tanjong Pagar last Saturday, Senior Minister Lee
Kuan Yew urged Singaporeans to brace themselves for more turbulence
and tension ahead in foreign relations. CHUA LEE HOONG examines the state
of ties between the Republic and its giant neighbour.

THE financial storm that lashed Asia in the past year has left a trail
of wreckage, not only in societies and economies, but also in politics.

Domestically or bilaterally, relationships among politicians have never
been the same since the currency tornado brought low a series of countries
in the region, beginning with Thailand in July 1997.

Singapore has been no exception.

For a good quarter of a century, its southern neighbour counted as one
of the republic's closest, in trade, diplomacy and people-to-people ties,
but from that same direction now blows gusts of ill temper and bilious
rancour.

Two months ago, there was the accusation that the city-state harboured
Indonesian "economic criminals", while refusing to sign an extradition
treaty that would enable Indonesia to bring these people to justice.

Last month came assorted allegations of dumping by Singapore companies
in Indonesian waters and the Riau islands, from marine clay to earth to
toxic waste.

Never mind that these allegations fizzled out when the accusers were
asked to furnish proof; the fireworks released had been a good show for
the folks back home.

Then, two weeks ago, in an interview with Taiwanese journalists, President
B.J. Habibie took up the cudgels himself, calling Singapore a racist country,
one in which Malays could not become military officers.

For students of Habibie-ology, the remark can be laughed off as another
careless potshot. This, after all, is the man who, according to Far
Eastern Economic Review editor Nayan Chanda, felt at the height of
the student demonstrations last year that there was no need for him to
meet the students for talks, since he "did not even have time to see
his own nephew".

"Domestically, he is seen as harmless and much less significant
than when viewed by those he intimidates overseas. By taking him too seriously,
foreigners may run the risk of missing the more consequential and diverse
voices of Indonesians."

Indeed.

But that is exactly Dr Habibie's beef with Singapore: he accuses the
"red dot" of not showing him enough respect.

Senior Minister Lee Kuan Yew's February 1998 remark, that financial
markets were "disturbed" by his appointment to the vice-presidency,
still rankles.

"His attacks on Singapore are being driven by this residual ill-feeling.
He wants respect from Singapore and Lee Kuan Yew and, in return, he will
respect them," Habibie adviser Umar Juoro said.

It is a chicken and egg question. Does Singapore show respect to the
leader of a country in a state of what can, politely, be called hentak
kaki (marching on the spot)? Or should it wait till things start moving
forward and a more permanent leader emerges?

Diplomacy and the long view may dictate "yes" to the former
question: Show respect now. After all, Dr Habibie may remain as president
after the elections, by compromise and default, if not by universal choice.

Dr Cornelius Luhulima, a 69-year-old Ambonese Christian and a visiting
fellow at Iseas, and formerly Dr Habibie's classmate in Germany, also gives
a qualified "yes".

He cites Mr Lee Kuan Yew's visit to Jakarta in May 1973, five years
after the Singapore government hanged two Indonesian marines sent by the
Sukarno government to plant a bomb in MacDonald House in Orchard Road.

The hanging angered Indonesian leaders and spelt a relational low, which
Mr Lee sought to reverse.

"He knew it would be very difficult. But he went, and the relationship
improved."

While in Jakarta, Mr Lee also visited the graves of the two Marines
and placed flowers on them.

Do such placatory acts have a place in today's environment?

The answer is less clear. In the first place, there has been no evident
offence, unlike the hanging of the marines in the 1960s.

The political players are also different. Dr Luhulima notes that the
key players then, Mr Lee, Mr Suharto, Mr S. Rajaratnam and Dr Adam Malik,
were all men of impressive elan and charisma.

"That type of leadership is gone now. Will it re-emerge? That's
the big question."

In any case, placation has a place only when parameters have been set
and abided by.

The hanging of the marines in 1968, despite Indonesian protests, made
clear what these were: Indonesia and Singapore must relate as sovereign
equals.

As Mr Lee said at a Chinese New Year dinner in Tanjong Pagar last week:
"We had to leave everyone in no doubt about Singapore's absolute commitment
to the rule of law and our intention to conduct relations with the world
on a basis of mutual respect and equality."

CUKONG WRIT LARGE?

FAST forward 30 years: an economic downturn and a new Indonesian president.

As if the double dose of uncertainty is not enough, add the many and
varied demands that the new president is making on the "little red
dot".

An enormous shroud of ambiguity surrounds many actions and events. The
apparent clamour for an extradition treaty, for instance, is believed to
be no more than an elaborate wayang to assuage Indonesian public demands
to go after the wealth of Indonesian Chinese believed to be in Singapore.

"It's an old, old issue," says Professor Leo Suryadinata of
the National University of Singapore.

A more recent demand is for cold, hard cash. Sources say that before
Singapore came up with its contribution to the International Monetary Fund
bail-out package, the initial request from Indonesia was for a few billion
dollars in cash, with no strings attached.

The attitude, says one diplomat, is of Singapore as a cukong writ
large. (Cukong are Indonesian businessmen, often ethnic Chinese,
who are beholden to the regime and end up as its financiers.)

Resentment of Singapore's success, suspicion of how it has accomplished
this and anti-Chinese sentiments are woven into that attitude.

More importantly, it can be seen as an attempt to redefine the parameters
that have governed the Singapore-Indonesia relationship.

Humanitarian assistance? Sniff. We have a right to more. That essentially
was the upshot of presidential adviser Dewi Fortuna Anwar's remarks to
the Straits Times on Tuesday, when she said: "Humanitarian
assistance smacks of charity. Indonesians are very proud and nationalistic
and we certainly don't want to be seen as a poor cousin getting handouts.

"We want Singapore to get us investments and help us in external
debt financing. This will earn Singapore Indonesia's goodwill because we
know they helped us when the chips were down."

To Dr Luhulima, such an attitude is prevalent among younger Indonesians,
who believe that Indonesia's size entitles it to obeisance from other countries.
The attitude is not necessarily shared by older Indonesians, who believe
in more negotiation and give-and-take, he says.

Interestingly, Dr Dewi's comments come barely a month after the signing
of a US$8 billion (S$14 billion) deal between Singapore and the Indonesian
state-owned Pertamina oil company to supply natural gas from the West Natuna
Sea to Jurong Island for 22 years. It was hailed as a landmark in economic
cooperation between the two countries.

"If she wants investments from a country, she shouldn't start shouting
at that country," remarks one observer.

HEAD OVER HEART

THE present tension between Singapore and Indonesia, while nowhere near
that of the late 1960s, is nevertheless still a low point in the relationship.

Barely three years ago, things had been at a zenith, with Prime Minister
Goh Chok Tong and President Suharto opening the Bintan resort jointly in
1996.

Ties had been on a steady upward path since the 1980s.

In 1989, the two countries signed an agreement for Singapore troops
to train in Indonesia. The following year, the $400 million Batam Industrial
Park project was sealed. In 1994, came the bilateral Tourism Cooperation
and Air Services Agreement.

The close military ties between the two countries were reflected in
the fact that Indonesian generals Benny Murdani, then defence minister,
and Try Sutrisno, then vice-president, were both awarded Singapore's highest
military honour, Darjah Utama Bakti Chemerlang (Tentera).

But in the midst of the cordiality, a number of people sounded the occasional
warning. Some said Singapore was placing too many eggs in too few baskets,
relying largely on the goodwill of President Suharto and on linkages to
Gen Murdani (a Catholic) and Indonesian Chinese businessmen, like Mr Anthony
Salim (Liem Sioe Liong).

Muslim Indonesians were particularly unhappy, seeing in these a Chinese-Christian
nexus that worked to their disadvantage.

Recognising these concerns, then Vice-President Try Sutrisno said in
1994 that ties had to be built as much through the heart as through the
head, on foundations of friendship and trust built up over the years, and
not just on a rational confluence of interests.

Are the atmospherics coming from Jakarta in recent months a result of
that dichotomy between head and heart?

President Habibie would no doubt say yes, Singapore is all head and
no heart. Singapore would probably say no: We have a heart, but the head
must rule. Especially in these uncertain times.

Peering into the future, it is hard to see another Suharto emerging:
someone in total control, yet accommodating and magnanimous enough to Singapore
to allow it to grow its own space in the world.

The most realistic prognosis is that any Indonesian leader who emerges
after the elections will be subject to populist pressures, some of which
may have a negative impact on the Republic.

Singapore's reaction in such a situation must be to hold fast to the
parameters of equal sovereignty laid down 30 years ago. Giving in to demands
will be interpreted as a sign that pressure works, and can only lead to
more demands.

While it desires cooperation with Indonesia, there is really very little
else that the red dot can do. Period.